Evan M. Lopez
In 2008, Bob Coyle, the now-infamous slumlord, walked away from millions of dollars in mortgages he'd taken out on a small empire of crumbling houses in Kensington and Port Richmond, leaving the local banks that'd loaned him the money sitting high and dry — and on top of more than 100 of Coyle's properties.
Among those properties was 3310 Argyle, a vacant shell that had sat neglected for years when Jamie Moffett moved in next door and watched as drug users went in and out of the abandoned house daily. Moffett — an acquaintance who first brought Coyle to this author's attention — had called Coyle repeatedly, demanding that he do something about the situation. When that didn't work, Moffett offered to buy the house, but was brushed off.
Not long after, the news came crashing down that Coyle had defaulted on more than $15 million in mortgages he'd taken out from local banks — loans that seem, especially now, to have been wildly disproportionate to the actual value of Coyle's junky inventory. But it was the height of the housing bubble, and the banks seemed more interested in having properties on their books than worrying about what they looked like — until, that is, the market crashed and Coyle defaulted, leaving the banks with only those houses to recoup their enormous debt. What's more, it turned out he had allegedly made false "rent-to-own" agreements with dozens of tenants, who had invested their hard-earned money into the houses for, it seemed, nothing.
The banks faced a dilemma: Normally, they'd foreclose on the properties and sell them at sheriff's sale, recouping their losses from the proceeds. But because the banks had been so wildly generous to Coyle — and because the housing market had crashed — their prospects of getting much back were grim. What's more, Coyle had amassed untold liens in unpaid taxes and utility bills, and those would have to be repaid to the city before the banks could touch any sale proceeds. Foreclosing and taking the properties to sheriff's sale would be, in a word, expensive. Finally, Community Legal Services, Volunteers for the Indigent Program and the office of Councilwoman Maria Quiñones-Sánchez had taken up the cause of tenants who, they say, have claims to ownership themselves.
And so the banks have simply sat on the properties, in essence turning into slumlords themselves — except for a single batch of properties, including 3310 Argyle which, Moffett learned not long ago, had been sold, along with about 50 other properties, to a company called GCG Investments, LLC, owned by one Manilal Mathai. Moffett resumed his phone-call campaign to get his neighboring property fixed up.
Mathai, Moffett says, "promised me it would be ready, with people living it, by April 1" — which it isn't. A contractor did show up and begin work, Moffett says, but then he disappeared, leaving the house to quick re-invasion by drug users, according to Moffett. After Moffett harangued Mathai again, another contractor appeared.
Meanwhile, various sources tell City Paper that Mathai is considering purchasing more properties — as many as 117 more — with, potentially, a new partner: Bob Coyle Jr., the son of the infamous Coyle Sr.
Laura Semmelroth, of the New Kensington Community Development Corp., says her organization learned that Mathai and Coyle Jr. approached various city agencies inquiring about possible relief of liens of other Coyle properties. The idea, confirms Community Legal Services' Jennifer Schultz, was to somehow transfer ownership from Coyle Sr. to Mathai (Schultz emphasizes that her clients will maintain their ownership claims, transfer or no).
When asked about his relationship with Coyle Jr., Mathai said, "I don't know anything about that." Coyle Jr. did not return a phone call, but has previously denied to CP any connection between his business and his father's.
The news nonetheless "sends shivers down my spine," says Semmelroth, whose organization has been trying to pressure the banks to negotiate with community groups and tenants rather than foreclose en masse, or execute some large, behind-the-scenes transfer to someone else.
"If they go to sheriff's sale, they'll be sold in a batch," says Semmelroth, to "guys with suitcases full of money."
That's what happened to the first — and, so far, only — group of properties to be relinquished by the banks: They were purchased en masse by Mathai. Semmelroth and other community development advocates fear that the neglect shown by Coyle Sr. will be replicated unless the banks are forced to negotiate with tenants. "Here's these neighborhoods just left to be preyed on again," she says.
Mathai, for his part, says he "will not be like the previous owner," and that he "will fix those houses up 100 percent." For now, Semmelroth, Moffett and the other neighbors of Coyle's old properties are left to cross their fingers and hope he means it.
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